While there are many great ways to invest in gold, most people opt to invest in bullion or even in the open market. However, the oldest form of gold investment is still the best for many small-scale investors. Scrap gold has the highest potential for profit than any other form of gold investment because scrap gold is often thrown out or can be found at very affordable prices.
In most cases, scrap gold includes things like broken jewelry, dental fillings, plated items as well as anything else which has lost its value as a result of use or damage. For the owners, these pieces of scrap gold are worthless and hold no value. However to a collector, it can be an invaluable source of the most sought after precious metals.
Calculating the cost of scrap gold is perhaps the hardest part about investing in it. It may take you several years before you get the calculation process correct. The first thing you will need to know and understand is what the going spot rate of gold is. You will then need to learn the different classifications and purity of the metal and how to determine this as a percentage. You will also need to know how to weight gold and what that has to do with the dimension of the piece you are valuing.
Most pieces of jeweler are marked by the jeweler as to their karat. However, not everything is and as a result, you will also need to invest in an acid gold test kit which can be purchased all over the place. Once you know what the karat is for the item, then you can weigh it and come up with a rough estimate as to the actual value of the gold which is in the item.
When it comes to items that have been broken or have lost their value to the owner, you will be able to buy these for a price which is much lower than the going spot rates. These are the most profitable pieces for any hobby investor. The amount you can get for the item under the going melt value will depend upon the seller’s knowledge and understanding of the value of the item.
Right now, because the value of gold has skyrockets in recent years, more and more people are cashing in on their scrap gold. They make their way to pawnshops and other buyers of gold to sell for a profit. While they understand that the spot rate is up, they do not quite understand the actual value of the item. As such, right now there is a lot of money to be made in dealing in scrap gold as well as other precious metals.
Just keep in mind that while the value of gold and silver has increased, the value of platinum has actually dropped. Before the recession, the value of platinum was far greater than that of gold even though the estimated quantities available are the same as gold. However, because the refining process was more difficult than gold, platinum has always been worth more. In recent years though, the value of this white metal is less than that of scrap gold.
Play it safe and learn as much as you can about investing in scrap gold before you start making any purchases as there is still a good chance of you losing a large portion of your investment.Dan Craig